LAHORE, May 3: The Punjab government's efforts for an interim National Finance Commission (NFC) award for the fiscal 2003-04 are said to have suffered a setback due to delay in the reconstitution of the commission.

"There's no possibility of finalization of a new or an interim award this fiscal year," finance department officials said on Saturday. "It will not be possible for the commission to complete its deliberations before the (fiscal) year is out even if the NFC is reconstituted today."

The provinces, they said, would have to live with the same old meagre resources for one more year. The five-year term of the 1997 NFC award expired on June 30, 2002, but was extended for one more year.

The province, the officials said, stands to lose something around Rs8-9 billion next year because of a delay in the announcement of the award.

The provincial government had begun lobbying with other provinces for the interim award for the next fiscal year "on the basis of negotiations held between them so far in view of little chances of its finalization during the current year". Sindh is also reported to have extended its support to the proposal because an interim award would offer the much required fiscal relief to the resource-starved province in the form of additional resources of 2.5 per cent in the share from the federal divisible pool.

The provincial share in the new award is expected to be enhanced to 40 per cent from the current 37.5 per cent. Inclusion of 2.5 per cent GST and subvention grants to the smaller provinces would raise their total share in the pool to 44 per cent.

Replying to a query, a senior official said there was no "concept of an interim award". "It was just a suggestion which was fielded in order to get a better deal in the shape of increased resources for the provinces in the fiscal 2003-04. Even the announcement of an interim award requires reconstitution of the commission and start of its proceedings. Unless the NFC is reconstituted and commences its deliberations, you can't hope to have the interim arrangement in place."

The officials said the reconstitution of the commission was being delayed because Balochistan was yet to nominate its private, non-statutory member on the NFC. Similarly, Sindh has not formally conveyed the name of Mr Abdul Karim Lodhi as its non-statutory to the NFC secretariat.

However, Punjab and the NWFP are said to have named their non-statutory members on the NFC. While Punjab has nominated Mr Saeed Ahmad Qureishi, the NWFP is said to have retained Dr Zubair. Both have represented their provinces on the previous commission.